Babies Don’t Have Debt

Summary

• Many adults are in debt, but babies aren't, which technically makes them richer.
• In the U.S., 35% of each paycheck often goes to paying off debt.
• Many people don't realize their mortgage, car payment, and credit card balances as forms of debt.
• People aim for 9-10% returns in the stock market but overlook the 24% interest on their credit cards.
• Credit card interest is a guaranteed cost against building wealth.
• To become wealthier, prioritize paying off high-interest debts like credit cards.

Video

How To Take Action

I would suggest starting by taking a good look at any high-interest debt you have, like credit cards. These are usually the biggest money drains because of the crazy high interest rates. Before dreaming about stock market gains, focus on paying these off. It's like plugging the leak in a sinking ship.

A good way of doing this is by listing all your debts, from highest interest rate to lowest. Start focusing all extra cash on the one with the highest rate first. It’s called the "avalanche method."

Next, be aware of all forms of debt you have. Not just credit cards but also things like your mortgage and car payments. Knowing these can help you manage payments better and plan to get rid of them faster.

Also, consider your spending habits. Avoid buying things on credit unless you can pay them off quickly. This means learning to budget and sticking to it. Sometimes even simple changes—like making coffee at home instead of buying it on the way to work—can add up to significant savings.

Finally, remember that banks make their money off people who don't manage their debt wisely, so don't be one of those people. By focusing on reducing debt, you're guaranteeing yourself a path to building real wealth, much like keeping the deck clean before stacking more cards on it.

Full Transcript

babies are richer than people who are not babies because babies haven't gone into debt in the US 35% of every paycheck goes towards debt there's a reason that banks are 100 plus years old that's because people don't think about their mortgage as debt they don't think about their car payment as debt they don't think about their credit cards is dead so many people are trying to get 10% 9% returns in the stock market with their credit cards 24% against them it's amazing they're guaranteed returns against you being wealthy so get rid of those